Kingston Intent on Acquiring a Stake in JMicron Technology

Investments are a common occurrence in the IT industry, as they are on every other industry out there, and it seems that one of the newest such moves will have Kingston and JMicron as players.

That Kingston was planning on acquiring a stake in semiconductor manufacturer JMicron is not exactly a new rumor, as the intent was discovered back in January.

Still, only now has this intent on the former's part been confirmed, or so it is claimed by a recent report from Digitimes.

For those that are not exactly up to speed with the activities of the companies, JMicron is mostly a maker of controller chips.

Among its better-known products are controller chips for SSDs (solid state drive), especially chips for devices that use the USB 3.0 connection.

Over the course of 2010, the company actually shipped a total of roughly over one million SSD controllers.

Of the output, Kingston accounted for 30%, or so say industry sources cited in reports preceding the most recent one.

Now, Kingston will pay JMicron the sum of NT$64, the approximate equivalent of US$2.21, in exchange for 1.5 million shares.

Basically, JMicron is getting funding on Kingston's part, while the latter will reap part of the overall profits gained by the former.

Each share will be purchased via private placement, leading to a total transaction estimated at NT$96 million.

The resolution was passed by JMicron's board of directions on February 10, 2011, but it is not altogether clear how long it will take before the action is finalized.

Either way, depending on how well the chip controller maker's products sell throughout the year, Kingston may or may not see significant boosts to its revenues and income.

What remains to be seen is how fast the company (Kingston) is when it comes to unleashing newer and better NAND Flash-based storage devices.